Block Applies for OCC Approval to Launch Crypto Custody Bank

TLDR

• Block has applied to the OCC to charter Builders Bank & Trust, a national trust bank focused on digital asset custody.
• The proposed bank would hold Bitcoin and stablecoins for customers under federal oversight.
• Builders Bank would not accept deposits and would not carry FDIC insurance.
• Lee Woolley, Block’s digital assets strategy head, is expected to lead the bank if it gets approved.
• A national charter would give Block one federal framework instead of separate state rules.

Block, the fintech company started by Jack Dorsey and Jim McKelvey, has asked the Office of the Comptroller of the Currency for permission to open a new bank. The bank would be called Builders Bank & Trust, N.A.

The goal of the new bank is narrow. It would focus on custody and fiduciary services for digital assets rather than everyday banking.

Block filed its application with the OCC to get this process started. If approved, the bank would operate under a national trust bank charter.

That kind of charter matters because it sets one federal standard for the bank’s operations. Block would not need to follow a patchwork of different state rules.

What Builders Bank Would Do

Builders Bank would center on custody services for digital assets like Bitcoin and stablecoins. Custody means holding and safeguarding these assets on behalf of clients.

This service can be useful for firms or individuals who want a regulated place to store cryptocurrency. Block has said the bank would be a non-bank institution.

That means Builders Bank would not accept customer deposits. It also would not offer FDIC insured accounts like a traditional bank.

Instead, its work would be limited to custody, fiduciary duties, and other trust related activities allowed under its charter. This sets it apart from a regular commercial bank.

Who Would Lead the Bank

Lee Woolley is expected to lead Builders Bank if the OCC approves the plan. Woolley currently serves as Block’s head of digital assets strategy.

He has more than twenty years of experience in banking and financial services. Block believes this background fits well with the goals of the new bank.

Woolley pointed to Block’s experience in digital assets and its work through Square Financial Services. He said this combination gives Builders Bank a strong foundation.

He also said the bank is meant to support Block’s broader plans in the digital asset space.

Block already has some experience working in regulated finance. The company operates Square Financial Services, which has given it exposure to banking rules and oversight.

At the same time, Block has kept building out its digital asset work. Bitcoin remains a central part of the company’s crypto strategy.

Stablecoins have also drawn more attention across the financial industry. Many firms see them as useful tools for payments and settlement on blockchain networks.

A national trust charter would let Block expand its custody services under one regulator. This could support the company’s larger digital asset plans going forward.

The application is now in the hands of the OCC. Regulators will review whether Builders Bank meets the requirements for a national trust bank charter.

Builders Bank would remain different from a standard bank throughout this process. It would not take deposits or offer deposit insurance under the current proposal.

Its permitted activities would stay limited to custody, fiduciary work, and related trust services. No timeline has been given for when the OCC will make its decision.

The application marks the most recent step in Block’s push into regulated digital asset services, with final approval still pending from the OCC.

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